The Firms

April 8, 2011 4:56 PM

Howrey Hit with Another WARN Suit

Posted by Brian Baxter

Howrey, sued earlier this week by a former employee over an alleged failure to meet its obligations under the Worker Adjustment and Retraining Notification Act, was sued again over claims Friday in federal court in San Francisco.

In the latest suit, Los Angeles firm Blum Collins represents 18 former Howrey employees whose 24-page complaint claims that the now-defunct firm failed to provide them with the 60-day notice required by the WARN Act prior to a mass layoff or office closing.

As previously reported by The Am Law Daily, Howrey mailed WARN letters in early March to its 702 employees ahead of the firm's official dissolution on March 15. Workers were told in the letters that they would be paid through May 9 if they failed to find new jobs by then.

But last week Citibank, a secured lender owed roughly $75 million by Howrey, informed the firm that it would no longer fund payroll services for most employees outside of a select group assisting the firm's dissolution committee. Howrey responded by issuing a memo in which the firm's remaining employees were told that they were being terminated--and all U.S. offices shuttered--after the close of business on March 31.

The putative class of plaintiffs now suing Howrey in California, where the firm had a substantial presence, includes staffers working in the firm's word processing, marketing and communications, secretarial, accounting, human resources, information technology, client services, and conference services departments. All worked out of Howrey's offices in northern Virginia or Washington, D.C.

Howrey, which is being advised on its dissolution by Latham & Watkins restructuring partner Peter Gilhuly, has claimed that Citi's decision to slash payroll funding unexpectedly forced the firm to close its U.S. offices prematurely. Unplanned events can act as a possible defense against WARN Act claims.

Blum Collins name partners Steven Blum and Craig Collins are representing plaintiffs, along with of counsel Douglas Thorpe, a former managing partner of Perkins Coie. As previously noted by The Am Law Daily, the firm served as lead class counsel in WARN Act certified class actions against defunct firms Heller Ehrman and Thelen.

While the Thelen class action is still pending, Blum Collins did recover nearly $20 million from Heller on behalf of former employees. Much of that settlement was deferred based on the result of bankruptcy litigation between Heller's creditors committee and Bank of America and Citi, which was resolved late last month.

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